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July 12, 2010

Global Capitalism and its Discontents: The Toronto arrests and the G20

SS Editorial

Toronto G20 Summit

In the single largest Canadian mass arrest, over 1000 activists (and bystanders) were swept up in Toronto outside the G20 conference. After a day of both peaceful mass protest and minority street action by black bloc anarchists, police went on a rampage, on Sunday June 27, to intimidate anyone who dared publicly question what our global rulers were up to – tear gassing, firing rubber bullets, ‘kettling’ crowds of demonstrators and passersby, and clearing the supposedly ‘free protest’ zone at the provincial legislature in Queen’s Park.

So what is it that the police are defending?

Climbing out of Global Capitalist Crisis?

The 2008 credit crisis has posed the single largest challenge to the market since the Great Depression. Unlike the 1997 Asian financial panic, the credit crisis today is generated at the core of the global economy, among the world’s leading powers, the United States, the European Union, and Japan.

This credit crisis originated in the high-risk financial mechanisms and strategies of the private market – as embodied in the sub-prime mortgage crisis. But now the credit crisis threatens to generate a second recession in a crisis of public finance. To save the private financial system from itself, public credit has been mortgaged. The United States, for example, has committed over one trillion dollars to rescue financial markets, while Greece may go bankrupt.

Public debt is supposed to operate within certain limits: with countries borrowing up to 3% of GDP for current budgets and up to 60% of GDP as long term debt. The United States and Britain have borrowed 12% of GDP for current budgets, with long-term debt over 80% of GDP. Japan, the world’s second largest economy, has a long-term debt to GDP ratio of 212%.

This double crisis, of private and public credit, explains the G8 and G20 agendas with their plans to make ordinary people pay for the reckless behaviour of the wealthy – whether in terms of not honouring past promises to aid the world’s poorest or austerity for the workers of developed countries.

If we look at the Communiques from each conference what do we see?

The G8, the global forum for capitalist leadership since the stagflationary crises of the 1970s, now focuses more on security and development (and secretly prepares the economic agenda for the G20). In terms of security, G8 nations made revealing commitments: that they support the NATO mission in Afghanistan in its goal to remain until 2015 in an effort to have Afghanistan manage its own defense, and that it supports new peace talks between Israel and the Palestinian Authority for a two-state solution. Such commitments tell us a great deal about promises to leave Afghanistan in 2011 and how distant a two-state solution to Palestinian oppression has become since Israel attacked the Gaza Aid flotilla.

In terms of aid and development, Canada’s Harper government has tried to find an issue to soften its harsh nature with a five billion dollar maternal health program over the next five years (which they still managed to generate controversy over by denying any aid to reproductive health). Most countries were only willing to commit to two years funding. If past aid practice is anything to go by, such as the commitment in 2005 to fund HIV/AIDS treatment for all by 2010 (but only achieving 35% coverage, which is set to decline), this will prove to be another public relations exercise.

The real action was at the G20 conference – the new global market leadership body representing two thirds of the world economy. G20 nations committed themselves to a number of financial targets: to cut operating deficits by half by 2013; to stabilize the long-term debt to GDP ratio by 2016; and to make the financial system more regulated and transparent. These commitments, however, are voluntary or ‘aspirational’ as France’s President Sarkozy put it.

At a global level, capitalism is seriously unbalanced. The world’s most developed nations are in what is euphemistically called ‘an advanced deficit condition’. That is, they have dangerously overextended public credit and, rather than tax the rich, are moving to hard-hitting austerity programs with attacks on workers’ incomes and social wages. Slashing the Greek pension system and imposing a twenty five percent pay cut for public sector workers may become a precedent for a general assault elsewhere.

Not only is deflationary austerity on the agenda, but the G8 wants ‘transitional’ developing nations like China and Brazil to inflate by developing their domestic markets, rather than exporting into developed nations, and to become less competitive internationally by appreciating their currency. But in nations that count on their cheap labour-power, and make little social provision, how likely is this?

For all the talk of planning and regulation to coordinate such an uneven market situation, there are much greater odds that global competitive anarchy will deliver a second recession. The United States, for example, has still not passed re-regulatory legislation that will significantly improve credit transparency and the possibility of managing risk.

Resisting Global Capitalism’s Agenda

What about the majority who will bear the brunt of absorbing market failure?

This is a difficult challenge. The level of union or working class organization has declined in the last generation, in Canada from 40 to 29 percent of the workforce. The nickel miners strike in Sudbury at INCO has taken a year to end in a modest defense.

And, since 9/11, the level of resistance politics, the politics of those unjustly treated, has fragmented. Witness the disorienting debate about anarchist ‘direct action’ tactics, where all forms of protest are equal, regardless of their impact on mass mobilization.

However, the Canadian working class is still substantially organized. It makes decisive economic impacts in the market and on social wages, even in terms of a persistent social democratic electoral alternative – as in the recent Nova Scotia election. And, in the realm of direct community struggles, on the environment, native rights, and anti-poverty issues, resistance politics have influence. Despite internal conflicts about anarchist actions during the anti-Olympic protest, the Olympic Tent City occupation did force BC Housing to re-house some homeless in Vancouver’s Downtown Eastside community.

Direct action that is focused on class struggle goals still makes a difference.

In the above senses, then, the struggle against the worst potential crisis in capitalism in generations stands on a foundation of organization and struggle that can promise much – but we must act in whatever modest way now to realize that potential.